When people read about Tesla Motors these days, it’s usually about some new performance milestone or automotive accolade. Most recently, “Ludicrous” mode was introduced as a $10,000 upgrade that reduces the Model S 0-60 time to 2.8 seconds. Before that, it was all-wheel-drive and “Insane” mode. These are amazing achievements and definitely help mainstream consumers see electric vehicles as more than just glorified golf carts. However, it takes way more than a few successful drag races to achieve the customer loyalty that Tesla enjoys. Among current owners, 85% plan to purchase a Tesla as their next vehicle .
So what makes the difference? Tesla creates value for the consumer across nearly all of the major pain points of traditional vehicle ownership. Dealers? Forget that! You can just order your car on the website and follow it along as it’s custom-made in the factory. As for range anxiety, the Achilles heel of the EV world, Tesla has built a wildly popular, free Supercharger network for road trips.
A perhaps less well-known reason for Tesla’s unprecedented customer satisfaction, however, is the company’s approach to the software development lifecycle that enables the Model S to resemble a high-end smartphone more than a vehicle. Traditional OEMs usually assign only one software version to each model year for a particular vehicle, and it is never updated unless you buy a new car or if there is a recall and you take the vehicle into the dealership. In a Model S, however, your persistent cellular data connection enables frequent over-the-air (OTA) updates. In this way, Tesla has managed to reinvent the fairly rigid product lifecycle practices of Detroit using the latest ideas of continuous integration from Silicon Valley. And customers receive all of the benefits.
In January 2015, Tesla released an OTA update for the drive inverter (motor) that shaved 0.1 seconds off the 0-60 mph time for existing owners . Another update contained new traffic-routing maps applications, enhancements to the UI, and scores of customer-pleasing enhancements that are chronicled throughout online forums . The key point here is that vehicles have always been modeled as quickly depreciating assets. However, in Tesla vehicles, the ownership experience will actually improve over time, a completely foreign concept in the automotive world.
Additionally, Tesla has one of the most advanced diagnostics and fleet management capabilities in the industry. By logging performance data over the cellular connection , problems can be identified proactively and customer service issues can be handled quickly and precisely. Tesla will also be able to leverage advanced data mining and machine learning as its fleet size scales, using performance metrics to ensure vehicle reliability and reducing the iteration time for vehicle improvements.
In some ways, it seems strange for Tesla to give away free Supercharging and OTA software updates, especially since many customers would likely pay for them. However, Tesla is clearly taking a long-term view, valuing customer loyalty and word-of-mouth referrals over immediate profit maximization. After all, value is captured for each generation of Tesla car that a customer purchases as well as through positive referrals.
Ultimately, it will be fascinating to see where Tesla goes with the upcoming release of the Model X and Model 3 in a couple of years. The challenge will be for it to maintain its standards and innovative development practices as the company grows and production escalates above 100,000 cars per year. Also, everyone wants to know what comes after “Ludicrous” speed .
 Featured image. http://i.stack.imgur.com/mNA4dm.jpg